Mr NEUMANN (5:41 PM)
—I speak in support of the International Tax Agreements Amendment Bill (No. 2) 2010. Singapore is an important hub in South-East Asia. It has a dynamic economy and there is a very large manufacturing sector there. It has one of the highest per capita incomes in the world. It is very highly concentrated. Singapore is a small place, as anyone who has been there knows, but it is very much dependent on economic liberalism and its commitment to free trade and free markets is exemplary. Singapore is a very strong communitarian society. It is very outward looking and it trades very extensively with its neighbours. In terms of defence it is an important ally of Australia. It gives significant cooperation through APEC and the ASEAN Regional Forum. There are very strong links in terms of discussions on arms control and disarmament. We are very close partners with them in regional cooperation and defence training, and at RAAF Base Amberley, Ipswich, Singaporean military have trained and participated in defence activities for many years.

Singapore is Australia’s largest trade and investment partner in ASEAN and our sixth largest trading partner overall. We are as important to Singapore as they are to us. In terms of Singapore’s principal export destinations in 2009, we ranked No. 8; in terms of Singapore’s principal import sources in 2009, we ranked No. 17. Singapore is a very important country to us in terms of not just tourism but also defence, migration and other matters.

This legislation is particularly important with respect to tax evasion, which is a curse throughout the world. The integrity of our tax system locally is very important not just to our citizenry but also to the federal government budget and the delivery of services such as health, hospitals, education and the like. The OECD estimates that about US$5 trillion to US$7 trillion is held in tax havens and bank secrecy jurisdictions throughout the world. We are rigorous in terms of these issues but, as tough as we can be, shrewd and cunning people and companies will take every step to evade tax. A whole industry has developed in this area, not just nationally but internationally.

This legislation commits us to being a global leader on the implementation of international standards of tax transparency, making sure that the exchange of information we have with Singapore is at the leading edge. It makes sure that there are very few impediments indeed to the wide exchange of information to make sure that, with respect to taxation, double dipping does not occur and that abusive tax arrangements are not entered into.

This is very important to facilitate the prevention of tax evasion and the exchange of information between taxation and government authorities is crucial. Nothing can be done without the gathering of evidence and the tracing of accounts when money goes in and out of one country or another. Australia may be geographically an island, but we are not with respect to the flow of information and finance.

There is a long history to this matter and we are giving effect to what is known as the second Singapore protocol. It was signed back on 8 September 2009 and it amends the existing treaty we undertook with Singapore. Way back in 1969 the governments of Australia and Singapore entered into an agreement to avoid double taxation and the history of cooperation between the Australian and Singaporean tax systems has its genesis in those days.

The first Singapore protocol was signed in 1989. This bill will amend that protocol. It would have been previously carried out through legislation, but it lapsed with the proroguing of parliament when the election was called. This is not a contentious, difficult or partisan piece of legislation, but it is an efficient one that is necessary to protect the viability and sustainability of our tax system. It will go some way towards containing the abuse of tax havens. It means that the Australian Taxation Office can cooperate with the tax authorities in Singapore to make sure that we play our role in South-East Asia in ensuring compliance with the tax laws of both countries. This is good for business, trade and commerce between the two countries and it is good for our respective communities. I commend the legislation to the House.